After two years of steadily rising prices, the real estate market around the world has suddenly begun to slow – and there is little consensus on what will happen.
The industry is more volatile and fast-moving than ever, with market segments transforming up to 30% in a matter of weeks. For many people, buying a home can be very difficult – or even impossible.
This was the motivation for Barkel, A blockchain-based real estate platform that, via the Parcl protocol, enables users to invest in digital square feet of real estate in the most lucrative neighborhoods around the world.
Benzinga sat Trevor BaconCEO and co-founder of Barkleto gain insight into how to monetize the current real estate market volatility through cutting-edge blockchain solutions.
In the face of market volatility, the blockchain-based real estate investment platform Parcl offers a powerful use case for blockchain investing that provides security, stability, and hedging opportunities.
Bacon will speak in Benzinga The future of encryption Conference on December 7 in New York City.
BZ: In a volatile market, how can blockchain provide security and stability for investors?
bacon: Institutional property buyers price individual buyers because they buy homes in record amounts. There is a general shortage of housing supply, which has led to housing inflation. Fluctuating interest rates leads to more real estate volatility – we haven’t seen an interest rate rise like this in over 50 years.
Our mission at Parcl is to create a platform that gives everyone access to real estate. Parcl provides price exposure or hedging opportunities in exchange for taking a physical home and putting it on the blockchain. Parcl is linked to the real-world asset price per square foot that is tracked through the Parcl Price Feed (PPF) and the Parcl protocol.
This provides security and stability amid greater market chaos, giving homeowners and developers an opportunity to hedge their investments in the real world while giving investors exposure to the global real estate market, rather than a single, specific home.
BZ: What are the financial benefits of consolidating traditional investment strategies and new technology?
bacon: The real estate volatility that we have seen over the past three years demonstrates the importance of having a platform that provides liquid prices for real estate.
The market is moving faster than ever – both ways!
Real estate is known to be among the most stable investments, but the barriers to entry are very high and are increasing every day. By using the blockchain and orchestrating synthetic real estate, we are reducing the barriers to accessing the asset class.
Previous models – such as retail – required significant upfront capital and then time to close, which limited volume.
BZ: Since the start of the COVID-19 pandemic, we’ve seen increased volatility in the real estate market, but many of the current metrics are notorious for slow and delayed data delivery. How accurate is the data now released on the real estate market? Do you see an alternative to tracking real estate prices with timely information?
bacon: The current data standard is too late and does not accurately capture the main trends that have emerged in the real estate market over the past five years.
It’s annoying that key policies and decisions are made on such poor quality data that tracks a fundamentally different market than what is actually happening today.
Parcl Labs is our data and artificial intelligence efforts. We believe our data is the most accurate and timely available on the market. It updates daily and keeps track of all activities that happen on earth within any geographical boundaries.
For context, benchmarks like Case Shiller leave out more than half or more of the data that should determine residential property prices. For example, over the past five years, typical home turnover time has been nearly halved, with much of the market turning around in six months or less. This is due to the influx of new and active players such as institutional buyers. Case Shiller leaves these transactions out of the index.
Case Shiller is a lagging indicator for single-family homes only.
It is updated at the end of the month for the previous two months. At the end of October we will finally see numbers from August.
Traditional methods of analysis that rely on outdated and incomplete data sources lead to inaccurate pictures of the housing market. We see the implications with data points like CPI and OER (owner equivalent rent) that show the state of home prices and rental rates from late 2021/early 2022.
The world’s most important financial policy decisions are made based on this data. For us, this is unacceptable.
This story is part of the content associated with the Benzinga Future of Crypto Summit 2022. Bacon will be among the speakers at Benzinga Inaugural coding conference December 7th.
Coverage: Ilona S from Pixabay.
#Housing #Markets #Decline #Blockchain #Technology #Solve #Real #Estate #Fluctuations #Interview #Parcl #CEO #Trevor #Bacon